#122 What We're Reading 12.2.22

⚽ Ronaldo $517M Saudi Deal, MENA Growth, $3.9B FAST

December 02, 2022

🪨 What We're Reading 🌊

Welcome to our 3,000+ readers!If you're not yet a subscriber, join our community of founders, investors, and operators and sign up here for FREE industry insights on Media, Tech, and Commerce.Hi readers,Below are 3 articles with the "RockWater Take" on each. Our insights will make you a better investor and operator. If you enjoy our curation, please forward to your favorite industry thought partner ;)Quick hits before diving in:

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📰 What We're Reading 📰

3 articles with our RockWater take on each...

📈 Why MENA Will Be The Next Media Growth Frontier

The RockWater Take by Chris Erwin

YouTubers localizing content is smart to build int'l audience. The next growth frontier? MENA and Arabic.👉 422M global Arabic speakers👉 Official language in 23 countries👉 Fastest growing Internet language by # of users (150M)👉 5th fastest-growing language in US schools👉 5.2% est 2022 GDP growth across MENA region, more than Western mkts👉 Ages 0-24 account for ~50% of MENA populationAll points to a large and fast-growing language and digital media market, but few are talking about it.Reminds me when our RockWater team started researching livestream commerce in China a few years ago, and were wondering why no one was talking about it in the US...well that changed!Back to MENA, the above figures explain why our team is seeing...🏗️ Big social incumbents exploring the build of local MCN infrastructure in MENA💰 MENA-based companies AND governments investing more in digital consumer experiences, from kids content to gaming, and wanting to build partnerships with western companies (we've gotten some inbounds, and now we're more proactively doing outbounds)🤳 The most prominent YouTubers now dubbing in Arabic....CHANNEL SUBS: ARABIC vs ENGLISH🔸 Kids Diana Show: 23M vs 104M🔸 Like Nastya: 23M vs 102M🔸 Vlad & Niki: 20M vs 90M🔸 MrBeast: 2M vs 114MWe want to help more MENA companies build better, and learn from Western mkt best practices. And also help MENA-based teams build relationships with Western media co's and talent.And vice versa.Western media co's need to plant seeds for new int'l growth, and MENA is a great region to begin researching and building new relationships in.Our team will keep tracking and sharing this info to help us all build smarter. Question --> are your teams doing any work in the region? Any insights to share? Let us know if so!

Some community input:

Kamel Weiss, GM at SpacetoonGo:  MENA has a young population with massive opportunities, there are brands and partners who even outperformed here compared to their home country. Proper localization is key but also needs the right partner who has the network/reach and knows the potential to grow!

Smurfs is a very good example, it’s Arabic channel is the #1 performing language exceeding the English Channel by x6 and the other 36 channels.

Mohammad Fattal, Founder / CEO at Alfan: Great to see! Being a creator network out of MENA we see the opportunity & are ready for it.

The Arabic-speaking population represents 5% of the global population and is expected to represent 7% by 2030, yet Arabic content is only 1% of global content and that is about to change 🔥 🚀

The RockWater Take by Michael Booth

Saudi Arabia continues to invest BIG in sports entertainment. A team in their national soccer league just picked up Ronaldo for a record breaking $207M a yr contract. Other big moves the country has made 👇🏼👇🏼$2B investment in LIV Golf$14B set aside by the Public Investment Fund (PIF) for eSports acquisitions$3.6B acquisition (in negotiation) of Liverpool Football Club$500B budget to build smart city NEOM, which will host many futuristic sports venues and has already begun hosting international competitions (2022 Neom Beach Games)Saudi Arabia is on an international spending spree to diversify its economy away from oil / gas by 2030. This includes loud investments (like Ronaldo) and quiet investments (did you know Saudi Prince Alwaleed is now the second largest shareholder in Twitter?).Where do you think they will acquire / invest next?Some RockWater team back-and-forth:

Alex Zirin: Very curious to see what sport is next… their pockets have no limits.

--> Michael Booth: Actually would be curious to hear KSA's calculus when deciding which which sports to target investment towards. Golf is interesting -- it's mid tier revenue, with one centralized league that LIV seeks to challenge.Alternatively KSA could blitz fast growing emergent sports (pickleball, spikeball, drone racing, etc) with $$$ and effectively own the market before other leagues have a chance to succeed Or additionally, in this case with soccer, KSA could seek to own a small piece of the largest global sports market.I'm actually most bullish on the second strat of blitzing a few fast growing emergent leagues. Of note, their NEOM 2022 Beach Games did focus on kite surfing, 3v3 basketball, beach soccer, and mountain biking. So there may be interest in emergent sports investing.What do you think?

The RockWater Take by Alex Zirin 

Excellent new report from out today on the rise of Free Streaming (FAST) TV platforms.A lot to digest in the report but here are the most notable callouts...💲 US FAST ad revenue reached $3.9 billion this year, and is expected to grow around 19% YoY to $6.1 billion in 2025. (Quick note here: In comparison, podcast ad revenue was around only $2 billion this year, but is expected to grow by 50% YoY. Notably, FAST has about half the number of monthly viewers as podcasts do monthly listeners. This helps to explain the difference in yearly revenue growth between the two)💪 Roku, Tubi, Peacock, and Pluto TV topped the charts in terms of total viewership🌎 In the US alone over 1000 FAST channels were added in 2022🏛 Financial institutions topped all other industries by total ad spend📺 Over 70 Spanish-language channels were added across the domestic FAST landscape this year, but less than 15 channels were added which serve other specific demographic groups. Given the changes in population growth across various immigrant populations in the US (namely, AAPI projected to become the largest by 2055), I'd expect to see more channel growth across other cohorts.Overall, the FAST space is at an interesting inflection point; nearly every household in America has free access, but more than 45% of Americans have never watched.In the current content economy, with consumers cancelling paid streaming services that they don't derive enough value from, FAST feels particularly advantaged. However, it's also its biggest hurdle. I'd expect to see a significant increase in awareness campaigns from the biggest players in the space.

📚 More RW Reads & Listens 🎧

  • Chris Erwin's podcast interview with Taehoon Kim, CEO of nWay on Raising $90M, Selling to Animoca, and Gaming x Web3 (link)

  • Jordan Pascasio's How Practical Are Livestream Shopping Applications for Whole Person Health & Wellness? (link)

  • Chris Erwin's post about the need for data-based decision making in the current capital environment and how RockWater can help operators navigate (link)

  • Chris Erwin's post about RockWater's latest wins (link) 

  • Michael Booth's How Elon Musk’s $8 Blue Checkmark Subscription Strategy is a $9B Opportunity for Twitter (link)

  • Chris Erwin's post about Bob Iger being named Disney's new CEO (link)

  • The RockWater team's Weekly News Curation (11.18.22), including 50%+ Drop in China’s ‘Singles Day’ Sales, 4 Hr Lines for Dobrik’s Pizza, and Disney & Netflix’s Content Experiments (link)

  • Michael Booth's 2022 Web3 Prediction: Digital Goods with High Consumer Utility Will Rise to the Top (link)

  • Chris Erwin's post about RockWater's Org Structure advisory services (link)

  • Alex Zirin's post about FTX's collapse and the uncertain future of crypto given the recent developments (link)

  • Michael Booth's post about Whatnot accounting for 90% of live shopping user sessions (link)

  • Eric Kenigsberg's Video Game M&A Watch List (link)

  • Kevin He's How eSports Team Revenue Models Will Evolve to Grab Share in the $600B Global Sports Market (link)

  • Chris Erwin's podcast interview with Zach Blume, Co-Founder of Portal A on 2006 Web Series, the Wheelhouse Investment, and Building with Your Childhood Friends (link)

  • Alex Zirin's 2022 Food & Lifestyle Prediction: *A Chef’s Kiss*: How Food & Lifestyle Will Merge (link)

  • Andrew Cohen's Why Sticky Habits Will Unlock Billion $$ Potential of US Live Shopping Market (link)

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